Interesting question, with many possible answers.
Yes, I would say that it can. There are two factors that I can think of that might cause this:
1. While the manager thinks he is empowering employees, what they may perceive is that he is being weak and has no vision or direction of his own. They may feel that they are being asked to take over the role of leadership when they are actually looking to the manager to provide it. That can make the employees lose faith in their management.
2. Along similar lines, but not exactly the same as above, if the challenges facing the organization are too great, the employees may feel that they are being given too much of the burden to solve all of the problems, a task they may not feel up to. As a result, they could feel that they are being asked to do too much.
I'm sure there are more factors that might play into this as well.